The human resources profession is just starting to catch up to finance and accounting in terms of codifying a standard business language. True, everyone in HR shares some common metrics, such as head count and time-to-fill. But HR is not even close to having anything like the working standards established by the Financial Accounting Standards Board (FASB) or the International Financial Reporting Standards (IFRS).
With modern HR systems now producing, collecting, and storing reams of data, a next logical step is to make sense of it all to enable intelligent business decisions. We see an early example of big data being collected and shared by companies such as Glassdoor and Salary.com. These companies are developing universal standards for labor benchmarks. Their widespread use of standardized job descriptions and company ratings can be used both nationally and globally. These examples may only be beginning for how the HR profession might change and grow.
HR and finance still struggle to see eye to eye in the domain of workforce planning. The topic is becoming more relevant as the speed of global business change increases. CEOs, CFOs, and CHROs need better and broader data on which to base strategic decisions. Even more important is a truly integrated data set in which HR and finance data comes from the same platform, eliminating silos of data that are difficult to correlate.
We see this in various research studies that show labor planning and execution as a top concern of today’s CEOs. Relatively few HR functions are prepared to meet the challenge. During an informal poll at a recent HR conference, almost all of the HR leaders present were not confident that they could even measure head count correctly. Head count is one of the broadly agreed-upon metrics in HR!
Circumstances are changing so rapidly that a broad standard of human capital business language will undoubtedly continue to evolve, both organically and with professional guidance. Only then will companies be able to constructively define and share labor metrics, internally and externally, as they are doing at Glassdoor and Salary.com.
In an economy based on people, information, and services, two clear areas for competitive differentiation are labor and technology. Oracle is just starting to scratch the surface of what’s possible in applying the latest data technology to human capital management. Few vendors are fortunate to have such a broad pool of cross-disciplinary functions from which to foster cross-pollination of ideas and growth.
Already, Oracle HCM Cloud’s workforce planning capabilities help HR and finance bridge the communication gap with shared operational assumptions for managing labor supply and demand. Given a shared framework, planners on both sides of the house are becoming able to create and manipulate meaningful scenarios with input from large data pools, sourced internally and externally. The long-term challenge is establishing agreed-upon definition and uniformity.
For strategic planning, leaders need good workforce planning data, based on broadly shared terms and definitions. With new systems and capabilities, HR is moving in the direction of standardization already achieved by accounting and finance. With well-defined and broadly shared data definitions, both internally and externally, business leaders will collaborate and plan for future workforce needs, better and more strategically.
Oracle Human Capital Management Cloud is ready for this future of standardized HR data. Powerful analytics capabilities that keep you informed span both HR and finance, enabling business-driven insights to help you succeed.